US confidence poll points to recovery

American consumer confidence rebounded in the run-up to Christmas, posting its strongest rise for four years and boosting hopes that economic recovery is just around the corner.

American consumer confidence rebounded in the run-up to Christmas, posting its strongest rise for four years and boosting hopes that economic recovery is just around the corner. It was the first rise in six months and followed three months of dramatic decline in the wake of the 11 September attacks.

The Conference Board, a private research group that polls 5,000 households every month, said consumers' short-term optimism was "no longer at recession levels". Lynn Franco, director of its consumer research centre, said: "The deterioration in current economic conditions appears to be reaching a plateau, led by a stabilising employment scenario."

The surge in the index, to 93.7 from 84.9 in November and a recent seven-year low of 82.2, was far above the economists' forecasts and was largest monthly gain since early 1998. Optimism about job prospects rose to its highest point since October 2000.

On Wall Street, shares indices rose as high as 1 per cent, as the news boosted hopes for a business recovery early in 2002.

Andrew Delano, foreign exchange analyst at Ideaglobal in New York said it was a "very good number". "It points to a very resilient consumer that is acting quite optimistically despite continued deterioration in the labour market," he said.

However the sheen was taken off by a set of mixed data elsewhere. The Chicago Purchasing Managers' index inched up in December, but still showing the 15th successive month of contraction. The number of Americans filing first-time unemployment benefit claims rose by 7,000 in the week to 22 December, reversing three straight weeks of declining claims.